WASHINGTON — President Obama's choice of Chicago business executive William Daley to run his White House operation is the clearest sign yet that he intends to move toward the political center as he approaches a likely 2012 re-election campaign, members of both parties say.

Daley's appointment Thursday follows several other efforts by Obama to work with Republicans after what the president described as a "shellacking" in the November midterm elections. He agreed to continue all of George W. Bush's tax cuts for two years and helped persuade 13 Republicans to back a new strategic arms agreement with Russia.

Obama also made clear he intends to woo Republican leaders personally, perhaps with an invitation to Camp David. His State of the Union address this month is likely to call for budget austerity and free trade agreements.

"I've always thought Obama had moderate instincts. I hope Daley will bring them out," says Rep. Jim Cooper, D-Tenn., a leader among centrist "Blue Dog" Democrats in Congress. "Daley knows business, he understands business, he lives business. And those qualities have been sorely lacking in this administration."

The direction Obama took with his choice was clear from the reaction: Republicans were pleasantly surprised. Liberal Democrats were disappointed.

"Daley is more moderate than anyone he's had in his White House to date," says Ed Gillespie, a former Republican National Committee chairman. "He is not hostile to American business and also has spent time in corporate America."

The closest AFL-CIO President Richard Trumka came to a compliment was to note that Obama "is of course entitled to choose a chief of staff in whom he has complete confidence."

Roger Hickey of the liberal Campaign for America's Future, looking ahead to other expected personnel moves, quipped: "It would be nice if one of these appointments didn't have a Wall Street connection."

Their fears stem from some of Daley's past actions and statements. He was a crusader in 1993 for the North Atlantic Free Trade Agreement signed by President Clinton despite labor opposition. And in an interview with The New York Timeslast year, he said Democrats had "miscalculated on health care" and misinterpreted the message of the 2008 presidential election.

"The election of '08 sent a message that after 30 years of center-right governing, we had moved to center-left — not left," Daley said.

Last year, when Daley joined the board of the moderate Democratic think tank Third Way, he outlined his political philosophy. "I believe in Third Way's unique mission: advancing moderate ideas, challenging orthodoxies and building a big-tent political movement that can attract an enduring majority," he said.

Daley also brings a rare combination of managerial skills, political acumen and personal humility, associates say:

•He's a tough manager, much like Obama's first chief of staff, former congressman Rahm Emanuel, now running for mayor of Chicago. "He's going to have some tough negotiations with folks in Congress. They're going to respect him immediately," says former White House chief of staff Erskine Bowles, who worked with Daley during Clinton's second term.

•He's a behind-the-scenes player, akin to Obama counselor Pete Rouse, who filled the job on an interim basis since October. "He's fair and decent and smart and doesn't have a huge ego," says Robert Shapiro, who worked for Daley when he was secretary of Commerce from 1997 to 2000.

•He's blessed with sharp political instincts that come from being the son and brother of 21-year Chicago mayors, Richard J. and Richard M. Daley.

Obama summed up Daley's qualities in a brief joint appearance. "He possesses a deep understanding of how jobs are created and how to grow our economy," Obama said. "And needless to say, Bill also has a smidgen of awareness of how our system of government and politics works. You might say it is a genetic trait."

A lawyer as well as a business executive, Daley ran Amalgamated Bank of Chicago before joining the Clinton administration. Since 2001, he has been president of SBC Communications, then Midwest chairman of JPMorgan Chase.

Former Labor secretary Alexis Herman, who served with Daley in the Clinton years, calls the choice "smart and refreshing. I think it shows a broader-based outreach by the White House."

Yet consumer groups worry Obama will favor business over consumers. "Daley would act as a stovepipe for the interests of Wall Street," says Paul Blumenthal of the Sunlight Foundation, a watchdog group.

Last year, when polls showed voters were becoming disillusioned with Democrats controlling Congress, Daley reaffirmed his own moderate ideals.

"We must acknowledge that the left's agenda has not won the support of a majority of Americans," he said, "and based on that recognition, we must steer a more moderate course."

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